Defense stocks rally as Trump says Kyiv can win back all of Ukraine

Global protection stocks moved increased on Wednesday after U.S. President Donald Trump, in a major rhetorical shift, stated Ukraine may retake territory presently occupied by Russia.

In a post revealed in a single day on his Truth Social platform, Trump stated that Kyiv, with the assist of the European Union and the NATO army coalition, “is in a position to fight and WIN all of Ukraine back in its original form.”

The EU and NATO have supplied army and humanitarian assist to Ukraine — which isn’t presently a member of both group — because the begin of Russia’s invasion in 2022.

Trump stated his view got here after “getting to know and fully understand” Russia and Ukraine’s army and financial state of affairs, noting what he described as the “economic trouble” that the battle is inflicting in Moscow. The White House chief additionally likened Russia to a “paper tiger” — a time period that sometimes refers to a pressure that seems highly effective, however is in fact ineffective.

The U.S. president has beforehand suggested Ukraine would must be open to giving up some of its territory in peace talks, which Washington has taken steps to dealer because the begin of Trump’s second mandate.

In separate feedback on Tuesday, Trump stated NATO members ought to shoot down Russian jets getting into its airspace, following a sequence of reported incursions within the Polish, Romanian and Estonian skies by Russian plane and drones in latest weeks.

Defense stocks have been among the many high performers on the pan-European Stoxx 600 index on Wednesday afternoon.

German tank components maker Renk was final seen buying and selling round 6.5% increased, whereas Italian protection agency Leonardo and Swedish protection big Saab each rose greater than 3.5%.

German protection agency Hensoldt was one other high performer, up 5.8% at 3:30 p.m. London time.

Hensoldt Chief Financial Officer Christian Ladurner stated Trump’s feedback do not essentially change the general state of affairs for Europe’s protection business, however that they somewhat reaffirm the sector’s warnings that Russian President Vladmir Putin will proceed to check the bloc.

“I think, in general, we have to say that the developments we have seen in the last two days are very encouraging for Europe,” Ladurner informed CNBC’s “Squawk Box Europe” on Wednesday.

“We see that the U.S. is more and more, I would say, seeing the reality, what is really happening and what has happened. So, this is encouraging for us,” he added.

In Asia, main South Korean protection stocks — together with Hanwha Aerospace, Korea Aerospace and Hyundai Rotem — all posted gains of between 2% and 5% on Wednesday.

Stateside, U.S. protection stocks have been additionally increased. Lockheed Martin, RTX and Northrop Grumman all traded greater than 1% increased, whereas Boeing was up round 0.3%.

Ukrainian President Volodymyr Zelenskyy welcomed Trump’s Truth Social put up, saying on social media that he was “grateful” for the U.S. president’s “strong cooperation.”

Trump “clearly understands the situation and is well-informed about all aspects of this war. We highly value his resolve to help end this war,” Zelenskyy stated on social media platform X on Tuesday night.

Russia — which has improved rapprochement with Washington in latest months — additionally responded to Trump’s tonal shift on the Ukraine battle.

Kremlin spokesperson Dmitry Peskov on Wednesday stated Putin “highly values Trump’s willingness to help” discover options on Ukraine. Peskov disputed Trump’s labelling of Russia as a so-called “paper tiger,” nevertheless.